Impact of immigration on the economy

It is a very common practice that people leave their own countries and move to some other country in search of jobs or for some other reason.

But by doing so, they would either be improving that country’s condition where they move to or must be hindering. So what impact such immigration puts down on that country’s economic condition?

Immigrants mostly consist of the working population and so they add to the labour supply of that country and the potential output capacity of country increases. Along with the increase in population of the country, the aggregate demand in the country also increases raising the demand for labour. Moreover, such immigrants prove to be helpful to meet up all the job requirements that government need. Increase in working population also helps in decreasing the ratio of retired to working people i.e, dependency ratio.

Immigrants, being from working age are also made to pay taxes to the government and thereby, help in improving the government budget of the country. But as the population of that country increases, country faces shortage of housing and so social cost of the country increases in forms of falling living standards and increasing congestion. Immigration may also result in some sort of unemployment either because they are snatching jobs from the hands of the resident of that country or they themselves are not getting jobs.

So there are both positive and negative effects of immigration on the country where they head to.

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